Minister Flanagan outlines new Economic Diplomacy Strategy19 January 2016
Business networking reception, Iveagh House, 19 January 2016
Address by the Minister for Foreign Affairs and Trade, Mr. Charles Flanagan T.D.
Minister of State Harris, Distinguished guests, business leaders, secretaries general, heads of agencies, distinguished colleagues from across the public and private sector, ladies and gentlemen.
I am delighted to welcome you to the warmth of Iveagh House on this dark January evening. The aim of this evening is to provide a space for colleagues, friends and associates from the public and private sectors to meet, network and share ideas about how we collectively do business with the wider world and how, as a small trading nation, we can best ensure sustainable prosperity.
Since the Government acquired it, Iveagh House has been associated with international diplomacy and key events in our diplomatic history, including the Northern Ireland peace process. Success on this front has been of huge benefit to the country.
Indeed only last November we assembled here in this very room to commemorate the thirtieth anniversary of the signing of the Anglo-Irish Agreement, the key foundational document for the peace process. The peace process was dealing with the consequences of our history in general and of partition in particular.
The political consequences of partition have been foremost in our minds. Less obviously but no less significantly has been another consequence of partition. In 1922, the newly independent state of Ireland found itself cut off from its industrial base in and around Belfast. For the first fifty or more years of our independence, Irish political and business leaders struggled with how to develop as a modern economy.
In 1949, Daniel Morrissey, the Minister for Industry and Commence in the first InterParty government took what was to be a momentous decision for the economic history of this country. He established the Industrial Development Authority, the success of which has been the platform for a progression from relative poverty on independence to our success today.
The Irish economy is of course more than FDI. Through successful targeting and nurturing, we have built some hugely strong sectors: Agri-business, ICT, Medical Devices, Financial Services, Aviation, Bio-Pharma and tourism. All of these are supported in some way by the Government and our Agencies, including IDA Ireland, Enterprise Ireland, Tourism Ireland and Bord Bia. They are also supported by a strong and creative research and development sector. The recent positive stream of job announcements by the State Agencies underlie these successes.
However, we can never allow ourselves to be complacent or satisfied with the status quo. Alongside the need for constant innovation and agility to respond to industry trends, there are also significant challenges and risks ahead – the possibility of a British exit from the EU, the ongoing migration crisis and the current volatility in emerging markets to name just a few.
In the face of a volatile external environment, we must ensure that we remain at all times economically resilient. These are vital discussions and dealing with them is a hugely important part of our collective responsibility.
1. We must build economic resilience to protect jobs in Ireland.
This government recognises the role that exports play in supporting Irish jobs. Supporting Irish exports was a central element of the ground-breaking annual Action Plan for Jobs which has delivered 135,000 jobs across Ireland since the first such Plan was introduced in 2012.
A key aspect of the Annual Action Plan is its aversion to silos and its allocation of responsibilities to all Government Departments and, in the regional plans, to Local Authorities, and other partners. While it is a whole of Government Plan, great credit is due to my colleague, Minister Richard Bruton, for his exceptional work in this initiative.
Yesterday, the Taoiseach spoke about creating an additional 200,000 jobs between now and 2020 in order to reach full employment. Exports will play a crucial role in adding these new jobs. And as we look to enhance employment opportunities, we must also ensure that we build-in economic resilience to ensure our progress is sustainable.
In December, the Central Bank stated that as “a small open economy, sustainable increases in Irish standards of living are driven by steady export growth”. I agree with this assessment and believe that now is the time to take action to underpin our exports and secure the standard of living that we have all worked so hard to achieve.
To do this we must diversify our markets, expand our indigenous trade and promote Ireland as a leader for FDI in our strongest sectors, including bio-pharma, medtech, financial services, agri-business, tourism, aviation and ICT.
Economic diplomacy and a stepped-up approach by my Department to trade – through the Export Trade Council at home and our State Agencies and Embassies abroad – are vital tools for our future economic resilience and security.
The Export Trade Council has proven to be a strong and valued platform. The Council, which I chair as Minister of Foreign Affairs and Trade, is a forum which brings together all Ministers whose Departments are active in the export space – namely:
• The Ministers for Jobs, Enterprise and Innovation; for Agriculture, Food, the Marine and Defence; for Transport, Tourism and Sport, for Education and Skills and the Minister of State for Development, Trade Promotion and North South Co-operation;
• The State agencies, which we work in close and constructive partnership with at home and abroad are members: Enterprise Ireland, the IDA, Bord Bia, Tourism Ireland and Science Foundation Ireland;
• Other relevant Government Departments and agencies: Departments of the Taoiseach, of Arts, Heritage and the Gaeltacht and the Revenue Commissioners; and
• The thirteen private sector members who bring a very valued perspective to the Council’s deliberations.
The Council will continue to serve us well as our economic narrative now turns to ensuring economic resilience. Indeed, I believe that the Council and all its stakeholders have a critical role to play in uniting and coordinating our collective efforts behind the drive for economic resilience and sustainable prosperity.
2. A new approach to trade and business
Market diversification is crucial for Ireland’s long term economic sustainability, as recognised in the Government’s Trade, Tourism and Investment Strategy, and its Review of 2014.
Over the lifetime of this government, we have invested considerable resources in supporting Irish businesses in new and emerging markets. At political level, the Taoiseach and a lot of Ministers have led trade missions across the world, including to China, India, South Africa and the Gulf region. We have also received the Chinese and Indian Prime Ministers here in Ireland. We realise that those high-level relationships are key to underpinning Ireland’s trading success in those markets.
Stronger political relationships have been supported on the ground through the strategic deployment of our diplomatic resources. In 2014, the government opened new missions in China, Indonesia, Thailand, Kenya, Texas and Brazil – all now fully operational and available to support Irish businesses.
This is not a one-off process and this year I will ask the Secretary General of my Department to review the Embassy Network and to consider where else our resources can be deployed.
The next step is to the Embassy network with the resources to remain proactive and open more business hubs for our ever eager exporters.
For 2016, my Department will adopt a new approach to supporting Ireland’s trade promotion activities in three critical areas:
First, we will establish new market promotion funds to give our embassies more capacity and autonomy to pursue trade and wider promotional opportunities;
Second, we will deepen the links between the Embassy network and Irish business through a new programme of secondments and an increased flow of critical data on our exporting sectors and companies;
Finally, we will establish a network of locally-hired commercial attachés to extend the range and impact of our Embassies’ activities in support of trade.
This process is being driven by a newly-configured Trade Division which is led by Director General Eamonn McKee, and Directors Keith McBean and Jonathan Conlon.
3. We are open for business
Our new approach will augment the already important work that my Department and the Embassy network undertakes on a daily basis to promote Irish business.
The Embassy network act as first movers and pioneers, feeding back critical information and opportunities to the private sector and to the state agencies. For example, our Ambassador in Addis Ababa, Aidan O’Hara, played a key role in facilitating Dublin Airport as a hub for Ethiopian Airlines – a move that brought vital business to the facility and helped open Irish trade with the huge African market.
The diplomatic brand provides access for Irish businesses to high-level officials, academic and market contacts. A good example of this was in February last year, when Ireland became the first EU member state to have its exporting beef ban to China lifted. In this regard, I would like to acknowledge the work of Ambassador Paul Kavanagh and his team.
At the same time we became the first, and to date the only, EU Member State to secure beef access to the US market which already has generated over €12m in exports. Both of these successes were achieved through close collaboration between our Embassies, the Department of Agriculture, Food and the Marine and Bord Bia combining to provide the necessary technical, diplomatic and political inputs to unlock these markets.
Tonight as we speak there is a high level Chinese inspection team arriving in Dublin for a twelve-day visit which we believe is the next stage in completing the technical requirements to allow exports of Irish beef there to commence.
Embassies also provide assistance towards resolving specific regulatory difficulties for Irish exporters.
I saw this first hand last year when a company from my own constituency, Finline Furniture, required assistance from the Consulate in Shanghai. The Consulate worked tirelessly to ensure that Finline were able to exhibit and showcase their goods, as a result of which they won orders.
Embassies also have a resource of enormous value to us, namely their relationship with the global Irish.
This takes many forms, including the Global Irish Network (GIN), local business chambers, forums such as the GAA-supported Asia Ireland Pacific Business Forum, more sector-focused gatherings, and online communities.
We are currently examining the outputs of the recent Global Irish Economic Forum, but one thing is clear: the GIN and the global Irish are committed to Ireland as economic ambassadors in a competitive world. And the government in turn is committed to a deep and long-term relationship with them, done primarily through our diplomats posted abroad.
Our embassies and the diplomatic brand can mobilise these resources to stretch our reach and our access to key decision-makers in governments and business around the world. Networking the global Irish is another vital form of economic diplomacy.
4. Looking to the future
The Export trade Council, which I chair, is one of the key bodies introduced by this Government, greatly improving cooperation and coordination between the different arms of the Irish government overseas.
These measures have created efficiencies for the taxpayer and have a multiplier effect on all of our efforts abroad.
At our last meeting, I invited the members of the Council to reflect on our last four years and to look forward to how we might adjust and improve what we do. My officials are currently consulting with the members and I will convene a meeting of the Council later this month where we will share those reflections and look to the future.
While I do not want to pre-empt the outcome of those discussions, it is clear to me that, to build on our success, any new strategic approach that seeks to drive trade, tourism and investment for Ireland should include two principles: even deeper coordination across the relevant Government Departments and State Agencies; and sector-specific coordination with business.
The feedback I get from the private sector members of the Export Trade Council and from our Embassy network is that Ireland is strongest when it speaks with one voice.
We can see tangible benefits in the Embassy network and State Agencies coordinating through Local Market Teams and co-locating in Ireland House models around the world. This is as true of new emerging markets in Asia, the Middle East and Africa as it is of more traditional markets like the UK, France, the US and Germany.
The recent announcement by my colleague, Minster of State Harris, that Ireland will adopt a banner brand for the promotion of its International Financial Services sector is also a step in the right direction.
A banner brand for the industry – both public and private sectors – will mean that when Ireland runs promotion events in Hong Kong, New York or London we will have one clear message that will be heard above the chatter. We might consider what other industries and markets would be equally well served by such initiatives.
I wish to thank you all again for taking the time this evening to come to Iveagh House.
I want you to take away one message: our Embassies are wide open for business. Our diplomats want to hear from you and want to help, working alongside colleagues in the State agencies
I hope I have conveyed to you the priority this Department attaches to its trade brief. And how we are retooling our Embassy network to ensure our people’s prosperity. We have established our goal to create a network of Embassies as business hubs for Irish companies.
At headquarters and across the governmental system, we must ensure a joined-up approach, with shared strategies upstream that see real collaboration in the field that enhance our collective effectiveness in trade, tourism and investment.
As we reflect on the signal events of this decade of commemorations we can take pride our achievements over the years.
We are reminded of the dream of those and earlier generations of nationalists to make Ireland a free and prosperous nation.
We have tackled and resolved the two great legacies of partition, namely the political and the economic.
We have come through one of the greatest economic challenges since independence.
Everybody in this room has played a huge part in rising to that challenge. I acknowledge that and I thank you for your efforts.
We are poised on the cusp of a new chapter in our economic history.
Thank you and I look forward to our discussions.